He told the child abuse royal commission the Melbourne Response was not an arrangement for protecting the church.

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"I don't agree, but I can see that people say that," Mr Leder told the commission on Wednesday.

When asked why victims should forgo their legal rights in exchange for a modest sum, Mr Leder said it brought finality for both the church and victim.

Mr Leder said the scheme dealt with claims that would not have stood up in court.

"What victims give up when they sign the release is a legal claim that's unlikely to succeed," he said.

Commission chair Justice Peter McClellan asked Mr Leder if people with stronger claims might also be put off suing the church.

"Yes, I can see that," he replied.

It was now clear the Melbourne Response's capped payouts, which now stand at $75,000, did not meet the intended purpose of providing a financial recognition of the harm suffered by victims, Mr Leder said.

He conceded the church's stated position of "strenuously defending" any civil action would frighten the average person, drawing jeers from the public gallery.

He said the phrase was aimed at deterring one unscrupulous lawyer, but was used throughout the Melbourne Response.

Mr Leder revealed the church hierarchy had considered in 1996 the option of creating a legal entity for the purpose of being sued, but decided instead to design the Melbourne Response.

He said the church's approach had changed in the 18 years since.

"(It is) the sheer number of victims, but (also) a much greater understanding of the long-term effects of abuse," Mr Leder said.

Cardinal George Pell, who set up the Melbourne Response, told the royal commission earlier this year he now believes the church should be able to be sued.

A Victorian parliamentary inquiry last year recommended the Catholic Church be incorporated so it could be sued.

The commission heard an official at Catholic Church Insurance believed independent commissioner Peter O'Callaghan QC, appointed to investigate complaints, wasn't scrutinising victims enough and relied on their accounts too much.

"There is no investigation other than the pitiful interviews conducted by the independent commissioner, which are seldom more than an account of the events as given by the claimant," Laurie Rolls, of the church's insurance body, said in a letter.

Mr O'Callaghan said the process of his investigations was not included in the reports sent to the Catholic Church.

"I think this is the first time I have ever seen (Mr Rolls' letter). I reject it," Mr O'Callaghan said.

Cardinal Pell will appear before the commission via video-link from Rome on Thursday afternoon.